The long drought continues: No IPOs in the first quarter |
Connect with TechFlash on our Facebook page for all the latest technology news headlines and commentary, plus information and access to special events, photos from events, promotions and more.
Today On Techflash
- Amazon falls on world's most valuable brand list; Microsoft at No. 5
- Microsoft to offer $15 upgrade to Windows Pro 8
- Amazon announces deal with Paramount Pictures
- Seattle TaskRabbit will run your errands, do your chores
- Startup of the Week: LocalBonus aims at 'buy local' movement
- Microvision gets NASDAQ delisting warning letter
Mass High Tech
The long drought continues: No IPOs in the first quarter
It has been more than two years since a Washington technology company completed an initial public offering. And the long, hard drought doesn't look to be ending anytime soon.
No venture-backed companies in the entire country completed an IPO in the first quarter, the first time on record that there have been two consecutive quarters without any new offerings, according to the National Venture Capital Association. The mergers and acquisition market also took a hit in the first quarter, with 56 companies selling out at an average disclosed deal value of $49.6 million. That compares to 106 deals at an average deal value of $113 million for the same period last year.
"We predicted that the venture-backed IPO market was going to get worse before it was going to get better, and we were unfortunately correct," said Mark Heesen, president of the NVCA. "Today our concerns are not limited to the zero IPO issues but have now expanded to the shrinking pipeline of companies in registration. Once we begin to see a recovery, there won't be many companies prepared to take advantage of it, effectively extending the lackluster market until the pipeline rebuilds."
Only 26 venture-backed companies are currently registered to go public.
Venture capitalists are concerned.
"There is absolutely no public market and there hasn't been for venture-backed companies since 1999," said OVP's Chad Waite recently told TechFlash. Asked if the market will come back, he said: "I hope so."
UPDATE: Madrona's Matt McIlwain -- whose firm participated in one of the last venture-backed IPOs in the state with Isilon Systems -- doesn't think the IPO market will turn around anytime soon. "I think we will see very little, if any, IPO deal activity in 2009," said McIlwain. The problem is two fold. There aren't many companies in registration to go public and the valuations are bad. McIlwain said that most growth companies are now trading at one to two times their trailing 12 month revenue multiple, which compares to three to five times in the past.
"It is not a good time from a valuation perspective," he said.
By the way, the last Washington technology company to complete an IPO? That was Clearwire, which priced on March 8, 2007.
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
TechFlash Team
Recent Sponsor Posts
Follow, like, and connect to a broader audience for your company!
The Puget Sound Business Journal announces Social Madness: A Corporate Social Media Challenge, presented by Capital One Spark Business. This a local and national challenge that will spotlight the best social media programs of companies in 43 cities. The local challenge begins (following the nomination period) on June 1, 2012. The promotion will culminate in a national bracket challenge that will crown Social Madness champions in 3 categories based on company size. To see the official rules, visit http://www.socialmadness.com/rules.
For more information on how your company can participate, visit the nomination page here. Nominations are due May 15th.
BizDev Seminar Series - Leadership: Rallying People to a Brighter Future
Join us for this one-of-a-kind seminar series where you hear directly from the experts about hot topics to grow your business.
The skills to be effective as a leader can be learned. What are the skills and attributes needed to be effective top leaders? How do you tell what level your people are at, and what development skills each person needs? Workshop attendees will learn the answers to these questions and more.
Tuesday, May 17, 2012
8:30am - 10:30am
The Harbor Club, Seattle
Register here.
